Another quarter has rolled around, so did a
bullish Apple embarrass the Wall Street analysts yet again? Such an event
has seemingly been a quarterly tradition by now. But this quarter's
earnings reports, while sticking true to tradition in revenue and several other
areas, actually fell short of analyst's typically overly conservative
expectations in two areas.

This quarter's earnings will likely be
over-scrutinized in the face of much bigger questions facing the trendy gadget
maker. While there'd been a bit of optimism surround theupcoming
iPad 2 and availability of
a CDMA (3G) iPhone on Verizon, most Apple-related financial chatter over
the past two days had centered around the company's CEO, co-founder, and
creative guiding hand, Steven P. Jobstaking
a medical leave of absence (the CEO has battled cancer over the last
decade and is recovering currently from aliver
transplant).

Apple's official accounting of calendar Q4 2010
earningstrickled
inat around 4:30 p.m. on January 18.

Revenue was $26.74B USD, a new record, grossly
surpassing the consensus expectation of $24.4B USD and the "high"
expectation of $25.5B USD. Earnings per share (EPS) similarly whipped
expectations to the tune of $6.43 USD, versus a consensus estimate of $5.38,
and a "high" estimate of $6.02.

If there was one trouble spot in the earnings
report, it was the shipments of Mac computers and iPods, which fell short of
expectations. Apple only shipped 4.1 million Macs vs. a consensus of 4.3
million, and only shipped 19.45 million iPods vs. a consensus expectation of
20.3 million.

The iPod shortfall is perhaps expected -- sales of
the portable music playerhave slumpedas tablets
and smartphones have boomed, filling many of the niches once filled by the
portable music player. The lower than expected Mac shipments are a bit
more troublesome and a sign perhaps that Apple is slowing in its quest to gain
ground on industry leaders Dell and HP. The Mac shipments, while lower
than expected, represented a 23 percent increase from shipments a year ago.
The iPod shipments, on the other hand, represented a 7 percent drop.

Despite the couple of weak metrics, the record
revenue, strong iPad/iPhone sales, and higher than expected revenue/EPS
guidance for Q1 2011 all culminated to a generally positive reception of the
report. While it is early to fully characterize the net impact, Apple
stock in resumed after hours trading has swung upwards $7.23 USD/share, a 2.12
percent gain that almost erases a 2.25 percent Tuesday drop, which was driven by
the aforementioned leadership concerns.

Apple CEO Steve Jobs, put in a good word,
enthusing, "We had a phenomenal holiday quarter with record Mac, iPhone
and iPad sales. We are firing on all cylinders and we’ve got some exciting
things in the pipeline for this year including iPhone 4 on Verizon which
customers can’t wait to get their hands on."

Note: We originally overstated the revenue as $27B USD. It is actually slightly lower ($26.74B USD). Some have questioned the analyst consensus surrounding Macs. We have consulted several different publications, and the figure 4.3 million is consistent across them and appears correct. Apple also fell short of its own Mac sales predictions.